<p>"RBI is signaling their concern about bringing inflation under control. It (inflation) is high. The rate hike is within a range that is not unreasonable", Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters here.<br /><br />Following the increase announced by the RBI, the short-term lending (repo) rate stands at 8.25 per cent and the short-term borrowing rate (reverse repo) at 7.25 per cent.<br />Ahluwalia expressed optimism that inflation will come down in view of softening of prices across the globe due to prevailing sluggishness in the economy and good harvest expected this year.<br /><br />Headline inflation measured by movement in wholesale prices, was 9.78 per cent for August.<br /><br />"I think on the supply side also good harvest will have positive effect. My guess is that the global transmission of inflation will also be much less. Taking all things together, I think, the inflation will moderate", he added.<br /><br />About the impact of decline in value of rupee against dollar on economy, Ahluwalia said, "(Foreign) reserves are very high so I don't see any panic effect (due to low rupee)."<br />The rupee on Wednesday dipped to a two-year low breaching Rs 48 to a dollar mark. It, however, gained 12 paise and was trading at Rs 47.43 to a dollar.</p>
<p>"RBI is signaling their concern about bringing inflation under control. It (inflation) is high. The rate hike is within a range that is not unreasonable", Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters here.<br /><br />Following the increase announced by the RBI, the short-term lending (repo) rate stands at 8.25 per cent and the short-term borrowing rate (reverse repo) at 7.25 per cent.<br />Ahluwalia expressed optimism that inflation will come down in view of softening of prices across the globe due to prevailing sluggishness in the economy and good harvest expected this year.<br /><br />Headline inflation measured by movement in wholesale prices, was 9.78 per cent for August.<br /><br />"I think on the supply side also good harvest will have positive effect. My guess is that the global transmission of inflation will also be much less. Taking all things together, I think, the inflation will moderate", he added.<br /><br />About the impact of decline in value of rupee against dollar on economy, Ahluwalia said, "(Foreign) reserves are very high so I don't see any panic effect (due to low rupee)."<br />The rupee on Wednesday dipped to a two-year low breaching Rs 48 to a dollar mark. It, however, gained 12 paise and was trading at Rs 47.43 to a dollar.</p>